Capital Return?

jimmymack

Hi all,

I was going through my account statement in Degiro recently to prepare my returns and I noticed that there was a "Capital Return" item for UMC in July. Does anyone know what this is? Can't find anything on their site about it, and Investopedia says that return of capital is not a taxable event... but does anyone know if this should go in the annual return? I'm a bit confused by it!

Shedite27

I'd consider it a dividend rather than a CGT, but is still a taxable event IMO

https://www.umc.com/en/News/press_release/Content/investor/20220224-2

Revenue.ie details on page 6 here

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-06/06-02-02.pdf

jimmymack

Thanks Shedite27, I thought of it as a dividend as well - just got a bit confused when there was no DWT! I'll put it in the return anyway. Really appreciate your thoughts on this, thanks again!

daheff

i'm not sure how revenue look at this. But the company are treating it as a return of capital rather than a dividend. so they are saying they are returning funds advanced (invested) by shareholders to the company, and are pointedly not returning a portion of the Earnings of the company. I believe that this is done to be a non-taxable event for shareholders.

However, Revenue can be a bit funny, so if its a sizeable amount for you, best get some advice. if its not a sizeable amount, i'd be tempted just to pay the income tax on it. worst case if you do ever need to have a discussion with revenue/advisor you can bring it up and (probably) claim it back.

https://www.investopedia.com/terms/c/capital-dividend.asp

notsocutehoor

I don't think it's treated as a dividend, I think it's a CGT liability